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When Princess Anidori was eleven years old, the prime minister of Bayern visited the royal family of Kildenree. In all the commotion, Ani was able to steal away to the stables and help an overdue mare foal her colt. When the baby spoke its name, Ani was there to repeat it back. Ever since that initial connection, Ani and Falada could communicate with each other silently without anyone else hearing a sound.

After a clumsy tea with her lady-in-waiting and the key-mistress, Ani is comforted by Falada's good-natured indifference to human problems and is glad to take Falada out to ride with her father, the king, to work off the gloom of the day. He challenges his daughter to a race, but in an effort to win the king and his horse, Tirean, go too fast and improperly jump a fence, hitting the ground hard. Ani rushes to her fallen father, but Tirean steps over him protectively and refuses to let anyone get near him. Ani asks Falada to get her to move, which he does by speaking to her in their own, more physical horse language, different from the bond he shares with Ani.

After her father's funeral, Ani's mother informs her that she is sending her to Bayern to wed their prince. Ani refuses to go on the long journey tucked away inside a carriage, preferring to ride Falada, and for once her mother respects her wishes. Although Falada mentions to her that he will miss his nice stall and the good food, he admits that Bayern will most likely have nice stalls and good food too. Encouraged by Falada's stolidness, she and Falada lead their escort out of the palace gates.

At first, the princess is uneased by the Forest, but Falada has no such discomfort and she soon picks up his mood. She enjoys being with Falada and shares with him her worries about her mysterious betrothed, and although Falada doesn't care who his mistress marries as long as she feeds him and brushes him and takes him out for leg-stretching rides, he listens to her fears and she takes comfort in their friendship.

Only a week into the woods, Falada wakes Ani, warning her of rabid wolves coming towards their camp. She warns her guards in time to protect them all, but since Ani can't explain that her horse told her about the danger, some of her guards grow wary of her. Ani complains to Falada, saying that she thought they would be grateful, but in Falada's opinion people never make sense.

Ani's wary guards center themselves around Selia, her lady-in-waiting, and as the weeks pass Ani becomes aware that they seem to be up to something. One day, as they are walking alongside a deep gorge, Falada is uneasy, sensing that something isn't right. Suddenly, he is whipped by something and rears up on his hind legs. Luckily, Ani is a good rider and is able to stay on his back, all the while soothing him until he calms down. Suspicious of one of her guards who seems particularly close to Selia, a man named Ungolad, Ani feels the reckless urge to impress or even intimidate him somehow and so asks Falada to talk to Ungolad's horse about his rider. She shocks the burly man with the depth of her knowledge, silently related to her by Falada.

As they get within a week of Bayern's capital, Falada and Ani take a drink from the river a little away from the company. Falada tries to tell Ani that she lost something in the water as she drank, but he is interrupted by shouts coming from camp. Falada stays by the river as Ani moves closer to investigate. She overhears Selia, Ungolad, and roughly half the guard mutiny, declaring that Selia is going to steal Ani's identity. Ani grows frightened when she learns that they intend to kill her and replace her with Selia, and calls to Falada silently, but he is too far away to hear her. She tries to move towards him as quietly as she can, but is spotted by Ungolad. One of her loyal guards, Adon, tries to stop him, but before he can take a few steps he is swiftly killed by a traitor named Ishta. As the sounds of battle clash behind her, Ani flees as fast as she can. Unable to reach Falada, she makes her escape on another horse.

Falada is captured by Selia and her traitors, who are victorious in their mutiny and have slain every one of Ani's loyal guards. Falada is driven half-mad from losing Ani and seeing all that violence, but Selia still manages to ride him through Bayern's gates, making a grand entrance. However, Selia knows that if Ani were to reunite with her mount, their special bond would cause awkward questions. To prevent that from happening, Selia has Ungolad drive Falada fully insane so that she may order him to be put down.

Soon after being driven mad, Falada is lead to an arena to see if any of the stable workers can break him, but he throws off the man who is trying to ride him and neighs savagely. He lunges and bucks as if he never had been ridden before and forgot what a saddle is. Ani, disguised as a goose girl, manages to sneak into the palace stables with the intent to rescue Falada, but his maddened state prevents him from recognizing her when she comes near him. He has grown too wild to understand her mental communication, but appears to be calmed by the familiarity of her voice until something snaps and he kicks her in the face. Some time after this, he is taken to a knacker and is killed.

When Ani finds out about his death, she goes to the knacker's and pays him with one of her gold rings to give Falada a proper burial. Although bemused that a mere goose girl cares about a royal horse, he agrees to her request. A few days later, Ani walks to the pasture with her geese but stops short of the wall above the archway. Fastened to the stones, attached to a polished board of of dark wood, is Falada's head. Ani is horrified that they hung her friend on the wall the way they do criminals, but she can't look away from his cold, unseeing marble eyes.

One cold winter night, Ani feels lonely and restless and walks to where Falada's head has been placed. Longing for his comfort and companionship, she speaks his name silently, the way she used to, and strains to hear him again. She succeeds in hearing a faint echo of his final word to her and reaches out again with her mind, but instead of hearing the echo of Falada, a new voice answers her. She hears the voice of the wind itself, naming her Princess. She returns to Falada every day to speak his name and strain to hear the wind's response. As time passes, she learns how to listen to the wind and wishes that she could tell her friend that he helped her discover the key to its language.

She eventually succeeds in defeating Selia's dark plans and convinces the king that she is the real princess of Kildenree. One of her first acts after she marries Geric, the prince of Bayern, is to take down Falada's head from the wall and have a quiet burial under a beech tree by the goose pond. Over this spot, she has a white stone carving made of a young colt and little girl in loving memory of their friendship.